Monday, July 23, 2012

Paulson tries to bounce back




Paulson & Co. Inc. is on track to survive a reversal of fortune that sources say very few other hedge fund managers could withstand.  Assets declined $17 billion — 44.9% — to $21 billion as of June 30, down from a peak of $38.1 billion in February 2011. Much of the loss is the result of poor performance over the past year of the New York-based company's flagship Advantage event-driven arbitrage strategy, although there have been modest investor redemptions, sources said.

The offshore version of Paulson Advantage Plus Ltd., which uses mild leverage, was down 35% in 2011 and 17.7% year-to-date June 30. The non-leveraged version of the strategy, Paulson Advantage Ltd., was down 36% last year and fell 11.61% in the first half of 2012…..But the firm has a saving grace: About 60%, or $12.6 billion of June 30 assets are from employees….

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